Expired provisions. More than a half-dozen popular breaks expired at the end of 2013. They include the individual retirement account charitable-rollover provision for people 70½ and older; an exclusion for mortgage-debt forgiveness that would otherwise generate taxable income; and a state sales-tax deduction in lieu of income taxes.

Even if Congress retroactively reinstates these provisions, as has happened several times in the last decade, experts don't expect any action until nearly year-end.

A delay will be particularly hard on IRA donors, who get tax breaks for making direct gifts of up to $100,000 of their retirement-account assets. Experts caution that such donors may want to wait to see if Congress acts before taking their required annual IRA withdrawals this year.

Online and mail-order sales taxes. Alaska, Delaware, Montana, New Hampshire and Oregon don't levy state sales taxes. Elsewhere, residents owe sales tax on their purchases—or the equivalent "use" tax, if the item was bought out of state.

Whether out-of-state retailers have to collect such taxes has been a continuing controversy for more than two decades—and one with huge implications for online retailers such as
Amazon.com
,
which now collects sales and use taxes from consumers in 19 states.

Last year, states with sales taxes and their allies—retailers that automatically collect tax on purchases, often in stores—won an important battle. In December, the U.S. Supreme Court declined to hear a case in which Amazon challenged a New York state law requiring Amazon and others to collect sales tax because of relationships with in-state affiliates.

Now the focus shifts to a bill the U.S. Senate passed in May, the Marketplace Fairness Act, which allows states to require remote sellers to collect taxes from consumers.

The bill is currently in the House Judiciary Committee. Sellers with more than $1 million of remote sales a year would have to collect tax for states they ship to, says
Craig Johnson
,
who heads the Streamlined Sales Tax Governing Board, which seeks to standardize and simplify how states collect sales tax.

"Buyers owe this tax already and I'm confident most retailers will be collecting it in the near future," he says.

Education tax-break changes. In October, House Ways and Means Committee members
Diane Black
(R., Tenn.) and
Danny Davis
(D., Ill.) released a bill consolidating four federal higher-education tax benefits: the American Opportunity Tax Credit, the Hope Credit, the Lifetime Learning Credit and the tuition deduction.

The bill aims to simplify what critics say are often-confusing requirements for the different breaks. For example, the American Opportunity Credit is the best choice for many, but part-time students may not qualify for it. By contrast, the Lifetime Learning Credit is less generous but more flexible.

Some taxpayers might no longer qualify for a tax break under the proposal, which could spark political resistance. The new bill provides a maximum tax credit of $2,500, the same as the existing American Opportunity Credit.

But the benefit begins to phase out at just $86,000 of adjusted gross income for most joint filers (half that for singles). That's much lower than the current level of $160,000 of AGI for joint filers (half that for singles).

The chances of passage are unclear, says
Melissa Labant,
a tax specialist at the American Institute of CPAs, "but it's one to take seriously."

Road-warrior relief. This proposal would limit states' ability to tax the income of nonresident employees such as executives and salespeople who work in a state for 30 days or less a year. The limit wouldn't apply to professional athletes, entertainers or other public figures.

Currently there is a crazy quilt of laws and rules affecting road warriors, Ms. Labant says. "Some states require withholding for as little as one day of work," she says.

The House passed one version of the bill in 2012 and it has been reintroduced in the House and the Senate, with bipartisan support.

Ms. Labant says the CPA group strongly supports the bill and hopes it will be enacted this year. The bill "just makes sense," she adds. "Why create unnecessary tax-prep burdens for people?"

Although working groups of the House Ways and Means Committee have released proposals on business taxes, there isn't an equivalent plan for individual taxes because the two parties want to focus on different issues.

There is the prospect of bigger change down the road, however. President Barack Obama has nominated Sen.
Max Baucus
(D., Mont.), who heads the Senate Finance Committee, to be the next ambassador to China, and he is likely to leave the Senate soon.

The next chairman is expected to be Sen.
Ron Wyden
(D., Ore.), who has a demonstrated interest in tax change for individuals. His 2011 proposal, co-sponsored by Sen.
Dan Coats
(R., Ind.), has three tax brackets (15%, 25% and 35%) and no alternative minimum tax. It also would nearly triple the standard deduction and create a 35% exclusion for long-term capital gains, resulting in a top rate of about 23%.

Be sure to donate to charity for your tax deductions. Explore http://www.charityboats.org/. This organization accepts collectibles, all different vehicles, real estate, even aircraft. Take advantage of tax deductible donations for a worthy cause. It benefits both you and the needy.

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